Abstract
This investigation was carried out to extensively examine the financial performance of Sri Lankan licensed Commercial banks for the period 2010- 2019. This includes both state owned and private owned banks. The CAMEL approach was used in measuring banking performance and used capital adequacy, asset quality, management quality, earnings ability and liquidity position as independent variables and return on assets for measuring financial performance as the dependent variable. Data were collected among 12 licensed commercial banks for the period from 2010 to 2019 and the CAMEL model was tested. The results reveal that capital adequacy and liquidity position are positively related to the financial performance of commercial banks in Sri Lanka, while others were not supported under the period of study. This is mostly useful for Sri Lankan banks and other policy makers in enhancing the financial performance of banks.
Highlights
The banking sector is a very significant part of the financial system as it plays a significant role in achieving the economic growth of nations around the globe (Tumin and Said, 2011). Mckinnon (1973), Misra and Aspal (2013) explain that part of the financial system for economic development
The influence of CAMEL model components on financial performance of Sri Lankan commercial banks were studied from this investigation
In here capital adequacy, asset quality, management quality, earnings ability and liquidity position were used as independent variables while financial performance was the dependent variable which was measured by return on assets
Summary
The banking sector is a very significant part of the financial system as it plays a significant role in achieving the economic growth of nations around the globe (Tumin and Said, 2011). Mckinnon (1973), Misra and Aspal (2013) explain that part of the financial system for economic development. The banking sector is a very significant part of the financial system as it plays a significant role in achieving the economic growth of nations around the globe (Tumin and Said, 2011). Mckinnon (1973), Misra and Aspal (2013) explain that part of the financial system for economic development They explain the strong association between the growth of the economy and the development of the financial system. According to Rabaa and Younes (2016), well operating financial organizations play a significant role in economic growth and development. CAMEL is the model which measures the financial performance of the banks. This paper investigates the Sri Lankan commercial banks’ performance from 2010 to 2019 using the CAMEL model
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